Road shows can test mettle of hardiest company execs
Kansas City Business Journal - by Chris Anton Paus Contributing Writer
Say the phrase "road show" to anyone who has recently gone through an initial public offering and you'll get a one-word response -- grueling.
For the company going public, it means executives on the road, giving six presentations a day, for two to three weeks, in dozens of cities.
"It's grueling. There's no way to describe the physical and emotional drain two to three weeks on the road does to people," said Bill Collett, an investment banker from Kansas City.
Mike Carter, director of investor relations in Europe for Transaction Systems Architects Inc., agrees a road show can take a lot of starch out of the toughest executive.
"I think if you ran into an individual who told you they enjoy doing road shows, you should keep your distance from them," he said.
Both men speak from experience. Collett has helped clients go through the IPO process and put together road shows. He has done three road shows this year. Carter recently took TSA, an Omaha-based computer software company, through a successful IPO.
Hitting the road
Road shows, however strenuous, are an important part of the process of going public. They are the vehicle for reaching the investment community with an initial offering.
The road show occurs after the company files its intentions with the Securities and Exchange Commission and before the offering date.
Terry Christenberry, a partner of Collet's in Christenberry Collett and Co., said "It's really the selling process. You file with the SEC and, following their review, you go out and make these presentations. At the end of that period, the underwriters will gather orders, price the transaction and it becomes effective."
Sometimes, the road show results indicate there is not enough support for the IPO. Al Eidson, at Eidson & Partners, a Kansas City advertising agency, said a client of his withdrew its IPO following a road show.
"They came away from that with the sense that there was not as much interest," Eidson said.
A well-planned road show is essential to a successful public offering, said Jennifer Love of Barkley and Evergreen, a Kansas City advertising and public relations firm. TSA is one of her clients. She said the software company masterminded one of the most effective road shows she had ever seen. After a successful road show, TSA's initial offering traded at $15 a share. During its first year, it split and is now trading in the $40 range, she said.
Investment bankers, marketing consultants and advertising agencies can help a company engineer a road show. Collett said the keys are:
• A clear definition of the company and the investment opportunity.
• A concise explanation of the company's market strategy.
• A to-the-point description of what the business does.
• A discussion of the company's financial results prior to the IPO.
• Years of experience the management team has and the company has in the industry.
Collett said when he helps engineer a road show, he uses charts and graphs to tell the story.
"Typically, you want it to be a more visually appealing presentation as opposed to dry legalese," he said.
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